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I keep reading that semiconductors are on the cusp of a downturn and that the earnings multiples for eg AMD and Intel stock are too high as a result. In contra
by px1999 4y ago
I keep reading that semiconductors are on the cusp of a downturn and that the earnings multiples for eg AMD and Intel stock are too high as a result.
In contrast, there seems to be a crazy amount of investment going into fabs and improving chip processes.
These two things don't sound like they can both be true to me. Out of the two, surely the folks pitching 100B into building out their fabs have a better insight into demand than financial analysts.
Is there any way that this investment would make sense with a downturn in chip demand (/ is there some wall st malarkey going on / some other explanation that would make everyone's behavior congruent)?
- taneq 4y agoMy guess is you're looking at cause and effect here. Profits are going to drop because all that extra capacity is going to come online soon.
- ianai 4y agoOnly to then skyrocket as chips continue to be used in ever greater numbers/tech. War would increase demand. Switching to EVs would increase demand. Etc. But, oddly, it’s hard to look at market valuations over the last three decades and conclude things are low priced.
- irthomasthomas 4y ago> War would increase demand. But retail demand would tank, no?